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The demand for food, drink and hypoglycemic is high, and the demand for erythritol is strong. Excessive intake of sugar is the culprit of China’s increasing incidence rate of many diseases. To meet the needs of taste and health, various sweeteners came into being. They are mainly divided into artificial sugar substitutes, natural sugar substitutes and sugar alcohols, of which erythritol has significant advantages.
Saccharin, sodium cyclamate and other artificial sugar substitutes have potential safety hazards, and excessive intake is harmful to human body. Sodium cyclamate has been banned by the health departments of the United States, Japan and other countries.
The safety of Stevia glycoside in natural sugar substitutes has not been unanimously recognized by the world medical community, and the product is banned in many developed countries and regions.
Sugar alcohol substitutes have high safety. Among them, erythritol products have many advantages, such as positive sweetness, good taste, high safety, low moisture absorption, and can prolong the shelf life after being used in food.
Sugar free beverages drive erythritol demand. In recent 6 years, the annual compound growth rate of sugar free carbonated drinks has been nearly 50%. Its leading products such as Yuanqi forest use erythritol as sugar substitute, which has been recognized by consumers. Erythritol can accurately card consumption and upgrade the price band, which improves the market space. In the non beverage field, erythritol is still widely used, and the potential market space is about equal to rebuilding a beverage market.
Strong premium ability to open up market space. Erythritol has low sweetness, so it has low high price sweetness ratio and needs more purchase expenditure. Because of its healthier attribute, it attracts contemporary consumers to pay a premium. After replacing synthetic sweeteners, the market space of erythritol will be more than 30 times larger than that of artificial sweeteners.
Erythritol — a shovel seller in the competition for non saccharified food and drink. Sugar free food and drinks are like gold mines, with a wide range of gold miners, while erythritol manufacturers are more like people selling shovels behind gold mines. Compared with the fierce competition pattern of downstream consumer goods, erythritol industry is in monopoly competition and has a more favorable competition pattern.
Market Review
In the last week, the food and beverage index rose by 2.97%, ranking sixth among the 28 industries in Shenwan, outperforming the CSI 300 index by 1.89pct. Among the sub industries, beer (+ 6.46%), other wines (+ 3.78%) and soft drinks (+ 3.60%) performed better.
Top 5 gainers of individual stocks: Anhui Golden Seed Winery Co.Ltd(600199) , Gansu Huangtai Wine-Marketing Industry Co.Ltd(000995) , Anhui Yingjia Distillery Co.Ltd(603198) , Eastroc Beverage (Group) Co.Ltd(605499) , Shede Spirits Co.Ltd(600702)
The top five stocks with declines: Namchow Food Group( Shanghai) Co.Ltd(605339) , St Cody, Shandong Delisi Food Co.Ltd(002330) , Cha Cha food, Fu Jian Anjoy Foods Co.Ltd(603345)
Investment strategy
Key recommendations: 1 For companies that occupy a leading position in subdivided fields and have a good competitive pattern and strong ability to raise prices, focus on Chongqing Fuling Zhacai Group Co.Ltd(002507) and pay attention to Shanghai Bairun Investment Holding Group Co.Ltd(002568) , Angel Yeast Co.Ltd(600298) ; 2. the companies with less influence and marginal improvement will recommend Eternal Asia Supply Chain Management Ltd(002183) (Baijiu brand operation and marketing effectiveness). 3. After foreign investment, the competition pattern of the industry has improved. For beer companies with strong high-end certainty, focus on Chongqing Brewery Co.Ltd(600132) and pay attention to China Resources beer and Tsingtao Brewery Company Limited(600600) ; 4. Ternary organisms with strong downstream demand, limited upstream bargaining power, leading position in oligopoly pattern in horizontal competition and expanding production capacity.
